Index

Administration departments, 21

Aggressive shares, 134

AGM. See Annual General Meeting

Annual General Meeting (AGM), 34

APT. See Arbitrage pricing theory

Arbitrage, 22

Arbitrage pricing theory (APT), 136

Asset allocation, 132–136

Asset class investing. See Indexing

Axioms, 41–48

Bond market, 28–29

Call markets, 12

Capital asset pricing model (CAPM), 136

CAPM. See Capital asset pricing model

Cash, 134

Compounding, 93–97

Confidence, 63–64

Conservative shares, 134

Continuous markets, 12

Convertible shares, 26

Corporate finance, 21

Cumulative shares, 26

Cynical approach, 114–116

Dealers, 21

Debentures, 26

Decisiveness, 63–64

Derivatives, 22

Discipline, 65

Dividends, 34

Early years of trading, 87–89

Efficient frontier model, 131–133

Efficient portfolio construction, 130–131

Entrepreneurial endeavors, 28

Financial statements, 34–35

Fixed income, 134

Fixed interest, 27

Fixed property, 27–28

Futures market, 32

Gold coins, 33

Golden rules, 39–41

Growth-orientated managers, 112

Hybrids, 134

Indexing, 144–145

Index stocks, 144

Industry characteristics, 104–105

International Financial Reporting

(IFR) Standards, 34–35

Investment alternatives

bond market, 28–29

entrepreneurial endeavors, 28

fixed interest, 27

fixed property, 27–28

futures market, 32

gold coins, 33

other less liquid markets, 33–34

share installments, 31

spread trading, 32–33

unit trusts, 33

warrants, 29–31

Investment portfolio

benefits, 145

cost advantages, 145–146

financial plan adjustment, 146–147

indexing, 144–145

index stocks, 144

rebalancing, 146

threefold approach, 141

unit trusts, 142–143

Large company managers, 112

Liquidation, 35

London Stock Exchange (LSE), 12

LSE. See London Stock Exchange

Market characteristics, 104–105

Markowitz, Harry, 117, 131

Midsized company investors, 112

Modern portfolio theory (MPT), 117–118

Money management

financial plan with budgets, 84

lessons learned, 89–93

overview of, 81–83

savings and high interest debt, 84–85

successful investors start with savings, 83–84

MPT. See Modern portfolio theory

Myths, 48–52

National stock exchanges, 12

New York Stock Exchange (NYSE), 12

Nill paid letters, 26–27

NYSE. See New York Stock Exchange

Open Outcry System, 4

Ordinary shares (Voting), 25

Over-the-Counter (OTC) markets, 13

Passionate, 65

Passive investing. See Indexing

Patience, 64–65

Personality traits, 63–66

Portfolio lessons, 119–128

Portfolio maintenance, 75–78

Portfolio managers, 20, 111–113

Portfolio theory

asset allocation, 132–136

efficient frontier model, 131–133

efficient portfolio construction, 130–131

security types, 134

Positive attitude, 64, 75–78

Preference shares, 25–26

Random theory approach, 106–109

Regional stock exchanges, 13

Rights issue, 26–27

Securities analyst, 19–20

Securities exchanges, 12

Shareholders’ rights, 34–35

Share installments, 31

Small company managers, 112

Spread trading, 32–33

Stockbroker, 18–19

Stockbroking firm, 3

administration departments, 21

analytical interaction, 22–23

arbitrage, 22

corporate finance, 21

dealers and traders, 21

derivatives, 22

overview of, 17–18

portfolio managers, 20

securities analyst, 19–20

stockbroker, 18–19

Stock exchange(s)

benefits of, 14–15

creating passion, 8

demystifying, 4–5

global, 14

growth through acquisition, 8–9

research and development funding, 8

share incentive schemes, 9

venture capital and associated higher risk, 7

Stock Exchange Club

dominates for, 12

global, 14

listing requirements, 13

members, 12

structural differences, 12–13

Stock markets

demystify stock exchanges, 4–5

part of listed company, 5–7

Streetwise trader

management, 102–104

market and industry characteristics, 104–105

random theory approach, 106–109

track records and other factors, 109

Total responsibility, 65

Traders

influencing globalization, 118–119

in stockbroking firm, 21

Trading

early years of, 87–89

mistakes, 53–55

pitfalls, 55–62

traits, 68–74

Unit trusts, 33, 143

Value managers, 112

Wall Street

axioms, 41–48

golden rules, 39–41

Warrants, 29–31

WFE. See World Federation of Exchanges

Winners

at a glance, 105

random theory approach, 106–109

World Federation of Exchanges (WFE), 151–152